Venezuela’s Economy Grew 9.3% in First Half of 2005

According to Venezuela's Central Bank, the economy grew by 9.3% in the second half of 2005, continuing a long period of economic growth that began in late 2003. The private and non-oil sectors led this economic growth.

Caracas, Venezuela, August 31, 2005 —Venezuela’s economy continued its rapid expansion and grew 9.3% in the first half of 2005, relative to the first half of 2004, according to official figures of Venezuela’s Central Bank (BCV). The GDP increase in the second quarter of 2005, relative to the second quarter of 2004, was 11.1%.

According to the bank, most of this economic growth occurred in the non-oil sectors of the economy, which grew by 12.2% in the second quarter, while the oil sector grew by a mere 2.5%. If one compares the private and public sectors of the economy, the private sector expanded far more rapidly, by 13.1%, compared to the public sector, which grew only by 4.5%.

All non-oil sectors grew strongly in the second quarter. Manufacturing grew by 12.4%, commerce and repair services by 21.5%, construction by 20.3%, the government services sector by 7.4%.

A report by the Latin American economic research institution CEPAL, Venezuela’s economy will be the second fastest growing economy in 2005, with an estimated economic growth of 7.0% for 2005. Only Argentina, with a growth of 7.3% is predicted to grow faster. The economic growth for the entire region is expected to be 4.3% for 2005, according to CEPAL.

Venezuela ’s economy has been growing steadily ever since the fourth quarter of 2003, growing by 17.9% in 2004. Economists attributed part of this growth to the “rebound” from the large economic declines suffered in 2002 and 2003, of 8.9% and 7.7% respectively, due to the coup and the oil industry shutdown. Ever since the end of the second half of 2004, though, the country’s GDP exceeded its highest-ever mark, which had last been reached in 2001, before the political and economic crisis broke out.